Retaining credit representatives records

ASIC Report 330 (at paragraphs 78 to 87) noted that credit licensees must keep a record of all material that forms the basis of an assessment of whether a credit contract will be unsuitable for a consumer, and provide a consumer with a copy of the preliminary assessment if requested to do so. This includes assessments by its authorised credit representatives.

The report recommends that:

  • Credit licensees should have appropriate practices and procedures in place to be able to directly provide consumers with a copy of the preliminary assessment, if requested to do so, within the timeframe prescribed by legislation.
  • Licensees can reduce the risk of not being able to provide a preliminary assessment in the required timeframe by having direct access to the preliminary assessment and all documents that form the basis of that assessment from the date the credit assistance is provided.

COSL has now reminded its members that under COSL’s Rules, a person can make a complaint to it about a FSP up to six years from the day they first became aware (or should reasonably have become aware) of their loss. The six years does not start from the date the FSP provided the service or product to the person, it may start much later.

Once a person ceases to be a licensee’s credit representative, it may be very difficult to recover assessment documents and file notes from them. COSL says that” if the documents or file notes are required by COSL to refute an allegation made by a complainant against the representative , the inability of the licensee to produce the documents or file notes may result in COSL having to draw an adverse inference against the licensee: that is, that the documents or file notes do not exist or if they do, do not refute the allegation”.

COSL suggests that licensees should consider storing documents and file notes in a central repository that is accessible by the licensee.

For geographic diverse groups a cloud based system would be appropriate.

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